INCOME TAXES |
NOTE 17 – INCOME TAXES
The provision for income taxes consisted of the following:
|
|
Year ended December 31, |
|
|
|
2015 |
|
|
2014 |
|
|
2013 |
|
|
|
(thousands of dollars) |
|
Current federal provision |
|
$ |
4,062 |
|
|
$ |
8,756 |
|
|
$ |
6,748 |
|
Current state provision |
|
|
285 |
|
|
|
296 |
|
|
|
233 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred federal provision (benefit) |
|
|
5,367 |
|
|
|
(1,893 |
) |
|
|
1,173 |
|
Deferred state provision (benefit) |
|
|
50 |
|
|
|
(12 |
) |
|
|
(7 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense |
|
$ |
9,764 |
|
|
$ |
7,147 |
|
|
$ |
8,147 |
|
The difference between the effective tax rate in income tax expense and the Federal statutory rate of 35% for the years ended December 31, 2015, 2014, and 2013, is as follows:
|
|
2015 |
|
|
2014 |
|
|
2013 |
|
|
|
(thousands of dollars) |
|
Income taxes at U.S. statutory rate |
|
$ |
9,927 |
|
|
$ |
7,952 |
|
|
$ |
9,675 |
|
State taxes, net of federal benefit |
|
|
230 |
|
|
|
181 |
|
|
|
139 |
|
Permanent and other items |
|
|
(393 |
) |
|
|
(915 |
) |
|
|
(644 |
) |
Increase (decrease) in valuation allowance |
|
|
- |
|
|
|
(71 |
) |
|
|
(1,023 |
) |
Total tax expense |
|
$ |
9,764 |
|
|
$ |
7,147 |
|
|
$ |
8,147 |
|
The Texas margin tax rate was reduced in a legislative reduction effective January 1, 2015. Permanent differences are primarily due to the Federal manufacturer's deduction and stock options.
Tax effects of temporary differences that give rise to significant portions of federal and state deferred tax assets and deferred tax liabilities were as follows:
|
|
December 31, |
|
|
|
2015 |
|
|
2014 |
|
|
|
(thousands of dollars) |
|
Deferred tax liabilities: |
|
|
|
|
|
|
Plant, pipeline and equipment |
|
$ |
(14,996 |
) |
|
$ |
(8,352 |
) |
Intangible assets |
|
|
(284 |
) |
|
|
- |
|
Other assets |
|
|
(14 |
) |
|
|
- |
|
Investment in AMAK |
|
|
( 2,522 |
) |
|
|
( 4,382 |
) |
Total deferred tax liabilities |
|
$ |
(17,816 |
) |
|
$ |
(12,734 |
) |
|
|
|
|
|
|
|
|
|
Deferred tax assets: |
|
|
|
|
|
|
|
|
Accounts receivable |
|
|
283 |
|
|
|
276 |
|
Inventory |
|
|
1,785 |
|
|
|
1,018 |
|
Mineral interests |
|
|
376 |
|
|
|
376 |
|
Unrealized loss on swap agreements |
|
|
62 |
|
|
|
196 |
|
Post-retirement benefits |
|
|
330 |
|
|
|
327 |
|
Stock-based compensation |
|
|
969 |
|
|
|
1,705 |
|
Intangible assets |
|
|
- |
|
|
|
229 |
|
Deferred revenue |
|
|
- |
|
|
|
164 |
|
Gross deferred tax assets |
|
|
3,805 |
|
|
|
4,291 |
|
Valuation allowance |
|
|
(376 |
) |
|
|
(376 |
) |
Total net deferred tax assets |
|
$ |
3,429 |
|
|
$ |
3,915 |
|
Net deferred tax liabilities |
|
$ |
(14,387 |
) |
|
$ |
(8,819 |
) |
The current and non-current classifications of the deferred tax balances are as follows:
|
|
2015 |
|
|
2014 |
|
|
|
(thousands of dollars) |
|
Current: |
|
|
|
|
|
|
Deferred tax asset |
|
$ |
2,116 |
|
|
$ |
1,652 |
|
|
|
|
|
|
|
|
|
|
Non-current: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred tax assets |
|
|
4,637 |
|
|
|
3,269 |
|
Deferred tax liability |
|
|
(20,764 |
) |
|
|
(13,364 |
) |
Valuation allowance |
|
|
(376 |
) |
|
|
(376 |
) |
Non-current deferred tax liability, net |
|
|
(16,503 |
) |
|
|
(10,471 |
) |
|
|
|
|
|
|
|
|
|
Total deferred liabilities, net |
|
$ |
(14,387 |
) |
|
$ |
(8,819 |
) |
We have provided a valuation allowance in 2015 and 2014 against certain deferred tax assets because of uncertainties regarding their realization. The 2014 decrease in the valuation allowance of $71,000 is due largely to changes in our environmental accrual. The 2013 decrease in the valuation allowance of $1,023,000 is due largely to changes in our investment in AMAK.
We had no Saudi Arabian income tax liability in 2015, 2014, or 2013.
We file an income tax return in the U.S. federal jurisdiction and a margin tax return in Texas. Tax returns for various jurisdictions remain open for examination for the years 2011 through 2014.
|